Something strange is happening in technology right now. Companies are posting record profits and revenues while laying off tens of thousands of people, citing artificial intelligence as the official explanation. So far this year it is estimated that 363 layoffs at tech companies this year, affecting nearly 150,000 people (a pace of about 974 people per day, 44% faster than last year) according to TrueUp, a tech job board and recruiting platform that also runs one of the most cited tech layoff trackers.
The trend appears to be accelerating. Technological layoffs affect their The highest month in two years. last month, with nearly 40,000 cuts, and AI was the most cited reason for layoffs across all industries for the third month in a row, according to outplacement firm Challenger, Gray & Christmas.
However, there is growing skepticism that AI is really to blame – that it is more of a convenient cover than the real cause. Few examples illustrate the pushback better than what happened at payments company Block earlier this year. After being criticized for having fired almost half of the company Earlier this year, Jack Dorsey denied that the cuts were a sign of trouble, insisting instead that AI tools “are enabling a new way of working that fundamentally changes what it means to build and run a business.” But pressed by X commentators about the bloat he had created during the pandemic, Dorsey later acknowledged that Block had, in fact, overhired.
Other voices have also begun to weigh in, including famed VC Marc Andreessen, who recently called AI “the”silver bullet excuse“For dismissals that are actually due to mismanagement in some cases. conversation With podcaster-investor Harry Stebbings, Andreessen said: “Basically, all large companies are overstaffed. They are at least 25% overstaffed. I think most large companies are 50% overstaffed. I think a lot of them are 75% overstaffed. Now they all have the magic excuse: Oh, it’s AI.”
What makes this combustible is that at the same time tens of thousands of workers are being shown the door, a small cohort of AI experts are becoming rich on a scale that is difficult to comprehend.
Early last month, AI chip maker Cerebras Systems closed its first day on the Nasdaq on the rise 68% from its IPO price of $185, giving the chipmaker a market capitalization of about $67 billion, the largest U.S. tech IPO since Snowflake’s debut in 2020. In the end, co-founders Andrew Feldman and Sean Lie were billionaires. (Since then, the company’s shares have fallen 30%.)
Meanwhile, SpaceX went public on Friday and enjoys, as of this writing, a market capitalization of $2.1 trillion, making Musk a paper billionaire and potentially generating some 4,400 millionaires, and around 400 centimillionaires in the process, assuming shares don’t fall. Anthropic and OpenAI are advancing rapidly also into the public market, both with valuations of approximately $1 trillion or more.
The effects are also being felt closer to home. In San Francisco, which is now home to dozens of AI companies, including large AI labs, luxury homes routinely sell for million dollars above the sale price.
Then there’s Mark Zuckerberg. At the beginning of March he bought a 170 million dollar mansion in Miami’s “Millionaire Bunker,” setting the all-time record for the most expensive home sale in Miami-Dade County history. Two months later, Meta announced that he would dismiss 8,000 peopleor approximately 10% of your workforce.
Tech titans routinely shell out staggering sums on their real estate portfolios. But these extremes come at a time when many Americans are being stretched more than they have been in years.
Consider that workers with employer-sponsored health insurance face premium increases of approximately 6% to 7% this year, more than double the rate of inflation, the cost of private health insurance has roughly doubled since 2008 and median home prices have risen 28% since the beginning of 2020while mortgage rates have almost doubled.
In a New York Times/Siena poll from January 2026, 65% of voters said a middle-class lifestyle is out of reach, and a more recent survey found 76% of Americans They now consider the cost of living their top economic concern, a marked increase from 58% the previous year.
In short, this is about more than just job losses in isolation. That’s tens of thousands of laid-off workers facing an unusually unforgiving cost environment, at the same time as tens of thousands of AI experts are seeing once-in-a-generation paper wealth materialize, and being told that AI is the reason they’re out of work. Whether or not that’s the real explanation (many economists instead point to tariffs, war in the Middle East and broader economic uncertainty as the real drivers of corporate caution), the optics are what they are. One group is becoming incredibly rich thanks to advances that are supposedly replacing the other.
It’s not hard to find a precedent for what happens when that divide widens enough. In 2008, a financial crisis that began with loose lending and excessive risk-taking on Wall Street ended with bailouts for the banks that caused it, while millions of Americans lost jobs and homes in the Great Recession that followed. Three years later, that anger crystallized into Occupy Wall Street.
That move might seem strange by comparison if the current trajectory continues. Occupy Wall Street emerged from a crisis and public anger focused, in essence, on who paid for the cleanup. This time, there is no accident to point out. Companies are profitable, AI itself is creating a new breed of fortunes overnight, and layoffs are happening anyway, with AI cited as the driver. If the optics of 2008 were: “We’re bailing out the people who ruined the economy while you lose your job,” the optics here might end up being: “We’re getting richer than ever thanks to the same technology we’re using to replace you.”
Many companies (Block, Atlassian, Cloudflare among them) have seen their stocks rise when they point to AI as the reason for the cuts, so the strategy makes sense at first glance. Still, you might want to consider whether that’s really the message you want to send to the people you’re laying off and everyone else now watching.
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